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Retail investor interest in Bitcoin hits a three-year low, analysts are concerned.
Interest among retail investors in Bitcoin has hit a three-year low as Google searches for the cryptocurrency dropped 57% from Bitcoin’s peak in March. Crypto analysts argue that this decrease in the presence of retail acts as one of the major obstacles to the beginning of a new bull run.
CryptoQuant co-founder Ki Young Ju highlighted this trend in a July 18 post on social media site X, indicating that the average monthly change in retail investor demand for BTC has dropped below negative 15% over the last 30 days. The 30-day change in total transfer volume for $10,000 transactions, which expresses this metric, demonstrates declining interest from smaller investors.
“Bitcoin retail investor demand is at a three-year low,” he added, noting that reduced activity from retail investors is one of the most important market dynamics at the moment.
Retail investor interest is crucial for the bitcoin run
It has been more active with institutional investors, who usually do larger transactions. However, most analysts and traders believe that for BTC to see any meaningful price rallies, interest from retail investors needs to perk up again. According to Minkyu Woo, a contributor to CryptoQuant, large volumes of buying from retail investors were what started the previous bull runs.
“The real bull run typically starts with heavy buying volume from retail investors,” Woo said, adding that this has yet to occur.
In contrast to the general trend, VanEck CEO Jan van Eck said in an interview with Bloomberg last month that a large chunk of inflows into spot Bitcoin exchange-traded funds in the United States are still derived from retail investors. “I was surprised, but I don’t think it’s traditional investors yet. I still think 90% of the flows are retail,” said van Eck on April 11.
This contrasts, however, with recent data indicating a drastic slump in inflow into the Spot Bitcoin ETF. Inflows dived 87% compared to the previous day, to $53.3 million across the 11 products tracked on July 17th, according to Farside.
Retail interest drives bitcoin
Whereas the price of BTC continues to fight for a key level of support, on July 17, it surged briefly above $65,000 for the first time in 27 days, up to $65,686 before pulling back to $63,521. At the time of going to press, Bitcoin changed hands at $63,975 based on CoinMarketCap data.
Along with the fall in retail investor demand, search interest for the term “Bitcoin” has also dropped. Google search interest for BTC stands at 44% below, at a score of 43, nearly down 57% since BTC came up to its all-time high of $73,679 on March 13. Generally, it spikes at major events around BTC; this metric gives a sense of general interest and sentiment from retail investors.
The state of retail interest is seen as the number one driver going forward for Bitcoin. Most analysts think that for the next large bull run, a rebound in retail demand is needed. Until then, of course, the market may just keep trudging on in this limbo, where institutional activity is helpful but not enough to drive price increases.
It remains in the eye of retail investors, whose behavior analysts and traders will continue monitoring closely as this crypto market evolves. Their participation was necessary to grow this market and give further height to BTC in the coming months.
